Are your website terms and conditions contractually binding?

With the recent crackdown by the Australian Competition and Consumer Commission (ACCC) on unfair contract terms in online contracts, the question whether website operators terms and conditions are contractually binding has risen again.  This is commonly referred to as the click wrap vs browse wrap debate.

Despite the paucity of Australian case law on this issue, the case of eBay International AG v Creative Festival Entertainment Pty Limited (ACN 098 183 281) [2006] FCA 1768 (18 December 2006) (eBay) provides guidance on how a court is likely to determine whether or not the terms and conditions on a website will form a binding contract.

In eBay, the question for determination was whether the operator of the website (Creative) had engaged in misleading and deceptive conduct by including a condition that tickets resold via online auction sites could be cancelled if onsold.  The Court held that the relevant conditions “conveyed a misleading representation that the seller is legally entitled to and would detect and cancel any ticket which is resold for profit and the holder of that ticket would be refused entry to the event“.

What was the Court’s reasoning?

In arriving at the conclusion that it did, the Rares J cited various cases which were authority for the principle that the parties cannot rely on the terms and conditions of contract unless at the time the contract was made, the issuer did “all that was reasonably necessary to bring the terms to the other party’s attention“.  In case this it was held to be misleading and deceptive to purport to rely on conditions which were not adequately brought to the attention of purchasers.

This case highlights the importance of getting the basics right in preparing online contracts particularly in light of the consumer protection provisions contained in the Competition and Consumer Act 2010 (Cth).

Disclaimer

This article contains general commentary only.  You should not rely on the commentary as legal advice.  Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.

Malcolm Burrows

Malcolm Burrows B.Bus.,MBA.,LL.B.,LL.M.,MQLS.
Legal Practice Director
Telephone: (07) 3221 0013
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Mobile 0419 726 535
Twitter: @ITCorporatelaw

Dundas Lawyers
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Tel: 07 3221 0013

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